This recovery is driven by a rebound in onshore drilling globally, as oil prices recover. By 2020, DW forecast that the USA, China and Russia will represent a massive 69% of the total onshore OFS market.

The USA is the main driver of global onshore OFS trends – over 2011-2015, 42% of total onshore OFS expenditure was attributed to the USA, driven by the unconventional boom. After a lean few years, DW expects a recovery in onshore drilling in the USA through the forecast period, predicting a 143% increase between 2016 and 2020 for annual onshore wells drilled as rising oil prices bring lower-quality shale acreage back into economic viability. This will result in a recovery in OFS spend – DW expects a year-on-year growth rate of 21% for onshore OFS expenditure for the USA between 2016 and 2020, reaching $68bn by 2020.

China’s growing shale industry will drive onshore OFS expenditure throughout the forecast period. Onshore investment in China is moving away from mature oil plays and towards gas-targeted drilling – onshore drilling targeting gas in China is set to increase by 62% from 2016 to 2020. Although expenditure across all OFS service lines in China is projected to decrease in 2016, coiled tubing services will be one of the least affected (declining by 6%), due to increasing use for well intervention and horizontal/deviated conveyancing. DW expect China’s onshore OFS spend to reach $28bn in 2020.

Unlike China and the USA, where growth will be driven by unconventional drilling, Russia is set to drill numerous conventional wells to exploit East Siberia’s substantial gas reserves. This will help to satisfy the demands of upcoming LNG plants as well as huge piped volumes destined for China. Onshore drilling will therefore remain stable at approximately 8,900 wells drilled a year between 2016 and 2020. This sustained level of activity will lead to growth of at least 3% year-on-year across all service lines throughout the forecast period, resulting in onshore OFS expenditure reaching a record $33bn in 2020.

Despite strong growth profiles for the onshore OFS sector, combined expenditure levels in 2020 will remain at a significant discount to levels seen in the market upcycle for the three countries highlighted in this article, despite Russia’s individual growth. Overall expenditure across the three will total $129bn in 2020, just 65% of the 2014 peak. Despite the reduction, these three countries remain at the top, representing a massive 69% of the total onshore OFS market in 2020.